China's Open-Ended Funds Break $1 Trillion Barrier, Leading "Cash Migration" Trend

Cash management products were once a go-to choice for conservative investors, but their yield advantages are now shrinking.

According to data from the Shanghai Standard, as of June this year, cash management products had a total scale of 6.88 trillion yuan, down more than 4,300 billion yuan from last December's figure of 7.31 trillion yuan; their average annualized return rate was 1.54%, down 33 basis points from the end of last year.

Meanwhile, open-ended funds have seen explosive growth, with a total scale of 10.92 trillion yuan as of June this year, featuring 5,200 products and an average annualized return rate of 1.8769%, making them the new darling of the investment market.

The interest rate decline has triggered a wave of cash migration in the financial market.

A report by Postal Savings Bank noted that as of June this year, the average annualized return rate for cash management products had fallen to 1.54%, down 14 basis points from last year's end; and in the second quarter, it further dropped to 1.41%, with a cumulative decline of 27 basis points.

In the face of declining yields, many investors are seeking alternatives. Open-ended funds, which combine flexible redemption and relatively high returns, have gradually become a new choice for investors.